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2019-02-16 13:26:02

AMZN

Amazon.com

$1,608.88

-13.47 (-0.83%)

, XPO

XPO Logistics

$52.01

-7.535 (-12.65%)

…13:26

02/16/19

02/16

13:26

02/16/19

13:26

Amazon a risk for almost every stock/sector, Barron's says

Amazon (AMZN) is eating the economy, with its influence continuing to expand, and it seems that no sector is safe from the threat of Amazon disruption, Al Root writes in this week's edition of Barron's. On Friday alone, XPO Logistics (XPO) shares plummeted nearly 20% after the company reported a customer loss that analysts suspect is Amazon, the publication notes, while Kroger (KR) was under pressure previously after Amazon announced its plans to buy Whole Foods, Root notes. Further, investors fear that the e-commerce giant is willing to accept lower margins and that it could disrupt industrial distribution franchises like Fastenal (FAST) and W.W. Grainger (GWW), the publication adds. Reference Link

Citi analyst Mark May shuffled his U.S. Internet rankings, moving Alphabet (GOOGL) up to his top pick, replacing Amazon.com (AMZN). Alphabet is followed by Netflix (NFLX) and Facebook (FB). The stocks moving up in May's ranking include Alphabet, Facebook, eBay (EBAY), TripAdvisor (TRIP), Snap (SNAP) and Twitter (TWTR), while those moving down include Amazon and Yelp (YELP).

BWS Financial analyst Hamed Khorsand said he does not believe Amazon (AMZN) is going to try to enter the home router business with its newly acquired Eero brand, adding that Netgear (NTGR) has been able to leapfrog Eero in mesh networking for more than a year. Khorsand, who continues to sees 2019 as "a breakout year" for Netgear, keeps a Buy rating and $65 price target on the shares and contends that the weakness on the Amazon news presents a buying opportunity.

02/14/19

RSBL

02/14/19NO CHANGETarget $212RSBLBuy

Shopify price target raised to $212 from $190 at Rosenblatt

Rosenblatt analyst Mark Zgutowicz raised his price target on Shopify (SHOP) shares to $212 from $190 following the company's Q4 report, stating that large DTC direct-to-consumer companies are leveraging Shopify's platform to take "back ownership of their brands, largely from Amazon." Though "the stock may appear optically expensive," he still sees good value, added Zgutowicz, who keeps a Buy rating on Shopify shares.

02/15/19

JPMS

02/15/19NO CHANGETarget $78JPMSOverweight

JPMorgan cuts XPO Logistics target to $78, removes from Focus List

JPMorgan analyst Brian Ossenbeck lowered his price target for XPO Logistics (XPO) to $78 from $84 and removed the stock from his firm's Analyst Focus List following the company's Q4 results. The analyst expects XPO shares will be under pressure as the market digests a second guidance cut in as many months from "persistent uncertainty" in Europe combined with the recent loss of a large customer. Ossenbeck believes the shipper that is paring down its parcel injection, brokerage, last mile, and logistics activity with XPO is Amazon (AMZN). The market will interpret the XPO contract loss as Amazon taking capacity in-house which is negative for FedEx (FDX) and UPS (UPS), the analyst tells investors in a research note. He lowered his price target for XPO but keeps an Overweight rating on the name.

XPOXPO Logistics

$52.01

-7.535 (-12.65%)

02/15/19

DBAB

02/15/19NO CHANGEDBABBuy

XPO Logistics results not as bad as they look, says Deutsche Bank

XPO Logistics reported weaker than expected Q4 results and guided down both 2019 EBITDA and free cash flow meaningfully, Deutsche Bank analyst Amit Mehrotra tells investors in a research note titled "Not as bad as it looks (even though it looks really bad)." He thinks XPO's largest customer Amazon.com (AMZN) reduced its business by $600M, reflecting insourcing of postal injection business and entirety of brokerage. This would explain, entirely, the reduction in 2019 organic growth expectations, says Mehrotra. Importantly, it appears this shift happened in mid/late December with zero advanced notice, which is helpful in understanding December's 2019 guidance, he adds. The analyst keeps a Buy rating on XPO.

02/07/19

02/07/19INITIATION

Fly Intel: Top five analyst initiations

Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. XPO Logistics (XPO) initiated with a Buy at Loop Capital. 2. Spectrum (SPPI) initiated with an Overweight at Cantor Fitzgerald. 3. Fiserv (FISV) initiated with a Buy at Buckingham. 4. BRP Inc. (DOOO) initiated with a Hold at TD Securities. 5. Omega Healthcare (OHI) initiated with a Sector Perform at Scotiabank. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.

02/15/19

MSCO

02/15/19NO CHANGETarget $116MSCOOverweight

XPO Logistics guidance cut raises concerns, says Morgan Stanley

Morgan Stanley analyst Ravi Shanker noted that XPO Logistics attributed its Q4 miss and FY19 guidance cut to macro pressures in Europe and substantial downsizing at its largest, unidentified customer. Given that he had believed XPO's customers were relatively sticky, the biggest takeaway was the pace at which XPO's biggest customer pulled its business and insourced its logistics, Shanker tells investors. Additionally, this guidance cut, the company's third since October, could raise questions about visibility into the business, said Shanker. The analyst, who said valuation remains supportive for the stock, put his model under review but keeps an Overweight rating on XPO shares.

KRKroger

$29.50

0.54 (1.86%)

02/07/19

BUCK

02/07/19INITIATIONTarget $24BUCKUnderperform

Kroger initiated with an Underperform at Buckingham

Buckingham analyst Bob Summers started Kroger with an Underperform rating and $24 price target. The company has established an "overly ambitious" goal for fiscal 2020 that entails significant investment, Summers tells investors in a research note. The analyst believes deflation, competitive activity, fuel profitability, and the economic cycle pose risk to the company's EBIT growth.

02/08/19

02/08/19INITIATION

Fly Intel: Top five analyst initiations

Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. American Airlines (AAL) initiated with a Hold at Argus. 2. Walmart (WMT) and Sprouts Farmers Market (SFM) were initiated with a Neutral at Buckingham, while Kroger (KR) was initiated with an Underperform. 3. Wrap Technologies (WRTC) initiated with a Buy at Chardan. 4. nLight (LASR) initiated with a Hold at Craig-Hallum. 5. RA Pharmaceuticals (RARX) initiated with a Buy at Stifel. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.

02/07/19

BUCK

02/07/19INITIATIONBUCKUnderperform

Kroger initiated with an Underperform at Buckingham

12/07/18

LOOP

12/07/18NO CHANGETarget $30LOOPHold

Kroger near-term visibility is 'solid', says Loop Capital

Loop Capital analyst Andrew Wolf kept his Hold rating and $30 price target on Kroger after its Q3 earnings beat, saying the quarter was driven by "solid cost control and gasoline profitability". The analyst also cites Kroger's comps of 1.6% topping his forecast of 1.2% and matching the growth rate of Q2, even though the company's "aggressive" 600-store remodel progress "remains below plan". Wolf adds that Kroger's valuation is unlikely to expand without acceleration in comps growth, even though he sees the company's visibility as "solid".

FASTFastenal

$62.97

0.61 (0.98%)

02/12/19

02/12/19DOWNGRADE

Fly Intel: Top five analyst downgrades

Catch up on today's top five analyst downgrades with this list compiled by The Fly: 1. BHP Billiton (BHP) downgraded to Neutral from Buy at Goldman Sachs. 2. Gilead (GILD) downgraded to Neutral from Buy at Citi and to Market Perform from Outperform at Wells Fargo. 3. Cisco (CSCO) downgraded to Equal Weight from Overweight at Morgan Stanley with analyst James Faucette saying Cisco's multiple has meaningfully expanded over the past 1.5 years as estimates and expectations have built in a likely benefit from security-driven networking. 4. Take-Two (TTWO) downgraded to Underperform from Market Perform at BMO Capital with analyst Gerrick Johnson saying that after a 2-year "hype machine" blast for its Red Dead Redemption 2 title and its "strong" premier, the buzz around the game has "dissipated markedly." 5. Fastenal (FAST) downgraded to Sector Weight from Overweight at KeyBanc with analyst Steve Barger saying he continues to view the company as a "best-in-class" distributor with a "sizable first-mover advantage" in OnSite and Vending, but he finds the stock's risk/reward as more balanced near his prior price target of $62. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

02/12/19

KEYB

02/12/19DOWNGRADEKEYBSector Weight

KeyBanc downgrades Fastenal on more balanced risk/reward profile

KeyBanc analyst Steve Barger downgraded Fastenal to Sector Weight from Overweight. The analyst continues to view the company as a "best-in-class" distributor with a "sizable first-mover advantage" in OnSite and Vending, but he finds the stock's risk/reward as more balanced near his prior price target of $62. At current levels, Fastenal is trading in line with its historical enterprise value to /EBITDA multiple as well as its historical premium to peers, Barger tells investors in a research note. Further, the analyst would not move his price target higher given the company's "tough comps against moderating cycle growth" and his view that distributor multiples are unlikely to return to historical levels.

02/12/19

KEYB

02/12/19DOWNGRADEKEYBSector Weight

Fastenal downgraded to Sector Weight from Overweight at KeyBanc

01/08/19

WOLF

01/08/19UPGRADEWOLFPeer Perform

Fastenal upgraded to Peer Perform from Underperform at Wolfe Research

GWWGrainger

$316.63

4.9 (1.57%)

01/25/19

RBCM

01/25/19NO CHANGETarget $240RBCMUnderperform

Grainger price target raised to $240 from $230 at RBC Capital

RBC Capital analyst Deane Dray raised his price target on Grainger to $240 based on its relative to peers valuation implying a 13% discount, which is near the midpoint of its historical range of a 25% discount to 5% premium. The analyst is keeping his Underperform rating on the stock however, saying the company's Q4 marked another operating miss that was accompanied by "light 2019 guidance including sharply lower gross margins, slowing December sales, and costly digital investments needed to keep up with e-commerce market". Dray believes that Grainger's volume growth will continue to slow without an added boost from price discounting.

01/15/19

01/15/19UPGRADE

Fly Intel: Top five analyst upgrades

Catch up on today's top five analyst upgrades with this list compiled by The Fly: 1. Viacom (VIA, VIAB) upgraded to Buy from Hold at Pivotal Research with analyst Brian Wieser citing valuation. 2. Citi (C) upgraded to Outperform from Market Perform at BMO Capital with analyst James Fotheringham saying the bank's Q4 earnings and outlook were "just fine," but the stock trades "as if tragedy were nigh" at a 2-year forward multiple of 6.3-times earnings relative to the average historical valuation of 9.5-times. 3. Grainger (GWW) upgraded to Outperform from Neutral at Macquarie. 4. Helmerich & Payne (HP) upgraded to Overweight from Neutral at JPMorgan with analyst Sean Meakim saying while Helmerich is not immune from lower exploration and production spending, there is too much pessimism on the company's ability to sustain EBITDA in such an environment. 5. Akamai (AKAM) upgraded to Overweight from Equal Weight at Morgan Stanley with analyst Keith Weiss citing his increased confidence in durable high single digit revenue growth and margins improving. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.

01/15/19

MACQ

01/15/19UPGRADEMACQOutperform

Grainger upgraded to Outperform from Neutral at Macquarie

01/08/19

WOLF

01/08/19DOWNGRADEWOLFUnderperform

Grainger downgraded to Underperform from Peer Perform at Wolfe Research

Volume is above average for this time of day. Breadth is bullish across the board. Advancing Issues: 1902 / Declining Issues: 1157 -- for a ratio of 1.6 to 1. Advancing Volume: 1,164,790,000 / Declining Volume: 519,618,000 -- for a ratio of 2.2 to 1. New 52-Week Highs: 119 / New 52-Week Lows: 36.

Shares of financial stocks are not participating in Thursday's Fed-inspired rally. A concerned U.S. Federal Reserve Bank cut its forecasts for further interest rate increases from two to zero on Wednesday. Fed watchers interpreted the dovish Fed move on Wednesday as a signal of concern over U.S. growth prospects amid worries in Europe, and to some extent, China. YIELD CURVE NARROWS: As longer-term bond yields decline, the yield curve flattens due to the narrowing of the gap between yields on short-and long-term treasuries. Banks depend on profitability from lending at the long term rate and borrowing at the shorter term rate. The profitability of lenders typically declines with a flattening of the yield curve. "Yield curves are responding to what they see, to what I believe is a global economic slowdown," said Peter Boockvar, Chief Investment Officer at the Bleakley Advisory Group, on CNBC earlier. BANKS ARE KEY ECONOMIC INDICATOR: In an earlier Wall Street Journal article, Ed Cofrancesco, CEO of International Assets Advisory, said, "banks are key components to our economy, so much that if they don't do well, they're a drag on the market and the economy as a whole." Publicly traded companies in the space include Bank of America (BAC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), U.S. Bancorp (USB), and Wells Fargo (WFC).

The Scotts Company and Major League Baseball announced that the Ohio-based company will remain the Official Lawn Care Company of Major League Baseball in a multi-year agreement. The renewal builds on the partnership that originally began in 2010, taking Scotts and MLB into a 10th season together. This is also the fourth season that Scotts is an official partner of MLB's PLAY BALL initiative, the league's collective effort to encourage young people and communities to engage in baseball- or softball-related activities, including formal leagues, special events and casual forms of play. As part of the extended sponsorship, Scotts and MLB will continue the Scotts Field Refurbishment Program where grants are awarded to youth-focused community organizations to give kids modern, playable ball fields. The Scotts Field Refurbishment Program is part of the company's larger Gro More Good initiative to connect children to more outdoor play opportunities by enhancing community greenspaces. "Memories are made outside, whether they're in a ballpark or in a backyard," said Josh Peoples, Senior Vice President, Brand Marketing, ScottsMiracle-Gro. "Connecting children with safe, quality places to play is a priority for Scotts and MLB continues to be a natural partner for us in this effort. Our long-standing relationship is rooted in community outreach and encouraging fans and families alike to engage and enjoy more moments outside."

Darden upgraded to Hold from Underperform at Gordon Haskett. Gordon Haskett analyst Jeff Farmer upgraded Darden (DRI) to Hold from Underperform, noting that the company and Bloomin' Brands (BLMN) are the only two casual dining companies over the last two quarters that have been able to convert same-store sales upside into upward revisions to consensus estimates for both earnings and margins, which is a dynamic he expects to continue into FY20. Farmer raised his FY19 and FY20 EPS estimates for Darden following the company's earnings report and increased his price target on the stock to $111 from $97.